Daily Energy Standup Episode #217 – Germany’s Economic Struggles, Qatar’s Emphasis on Natural Gas, and More

Michael Tanner: [00:00:15] What is going on. Everybody, welcome into another edition of the Daily Energy News Beat Standup here on this gorgeous Wednesday, September 27th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show, the band, the show, and the director, publisher of the world’s greatest website, EnergyNewsBeat.com, Stuart Turley, my man, how we doing today? [00:00:39][23.8]

Stuart Turley: [00:00:40] It’s a beautiful day in the neighborhood and it has been brutally fun and wild. [00:00:45][5.7]

Michael Tanner: [00:00:47] Yeah, man, you’re getting brutalized these past couple of weeks, but we like that. That means things are staying alive and you never cease to amaze the story Count. We have a tremendous menu lined up today, folks. We’re going to start out in Germany. Why Germany was the envy of the world and how it went to the worst performing major developed economy. What happened? So got to love this headline. Next up, Qatar Energy CEO sees natural gas as, quote, indispensable for not just the energy transition, but also after 2050. Interesting there. Maybe it’s because Qatar’s got a lot of natural gas. Who knows? We’ll find out. Next up, got to love us some Harold Hamm quote, Oil is headed as high as 150 a barrel unless the US government does more. I’m Harold Hamm has been making the the media circuit. Hopefully you can stop by the show at some point, wink, wink, and we can talk with them. But he thinks oil’s going to 150. We’ll dive into more of that in this article. Next up, how the energy transition push contributed to higher oil prices in a move everybody who watched the show saw coming. Oil prices are on the rise, according to this opinion article, based upon the energy transition. Stool dive into that and then finally ford halts work on $3.5 billion EV battery plant in Michigan. All very interesting just you will I give I give a breakdown of why they’re actually delaying this which is super interesting still then kick it over to me I’ll cover the brutalization. Speaking of that, in the markets today, we were down about one and a half percentage points overall oil. We did see a little bit of a rise here in the late trading session, 9053 that we did see the API crude oil inventory storage guesstimate that actually will drop today at 10:10 a.m. Eastern, 9 a.m. Central or 930 Central if you are in Central Time Zone. A listen to this and then we’ll glad you get on out of here and get back to work again. Appreciate everybody checking us out before we dive in and begin the show. As always, guys, the articles and analysis you’re about to hear are brought to you by the world’s greatest website. www.energynewsbeat.com The best place for all of your energy news doing the team does a great job of curating that website to make sure it stays up to speed with all of the latest and greatest energy and oil and gas news you can interact with the show at questions@energynewsbeat.com or via the description below. You can also see all of the timestamps and all the links to the articles via that same description. Check us out. Dashboard.Energynewsbeat.com or data News Combo Product. We appreciate everybody who’s signed up there. You know, if you’re one to figure out how do we support the show, subscribe to us on iTunes, subscribe to us on Apple Podcasts, Subscribe to us on Spotify. If you are on YouTube, subscribe to the YouTube show at Energy News Beat the old school. Mike would say Smash that like, but we’re going beyond likes. We’re going to subscribe now. Hit that subscribe button on YouTube. Appreciate it, guys. One of the best ways to support the show, check us out right there. I’m at a Brett those two. Where do you want to begin? [00:03:44][177.5]

Stuart Turley: [00:03:45] Hey, let’s start in Germany. I’ll tell you what, this is really a hoot. Germany went from envy of the world to the worst performing major developed economy. What happened? I’ll tell you, Michael, there’s a couple of things in this article that just absolutely crack me up to set the stage for this article I talked about yesterday while you were on vacation. I mean, you were on assignment and that was the fourth largest smelter or iron ore working on was shut down. So you sit back and kind of go, everything that has happened. VW just closed down their plant three months ago. They closed the oldest fertilizer plant in Germany. So this is now demonstrating that Nord Stream two, Nord Stream one all of the cheap natural gas started Michael from not having contracts. Then the war started. So let’s get into this. But it’s because they did not have low cost energy in Germany. This is a quote. Germany risks de industrialization as a high energy cost, and government inaction on other chronic problems threaten to send new factories in. High paying jobs elsewhere, said Christian Coleman, CEO of a major German chemical company, Iraq Industries. Now, you sit back and take a look. Michael, you and I have talked about Norway. Norway’s got Freyr battery where battery is coming to the United States to take advantage of the Inflation Reduction Act. Germany and all of the other companies are coming over here and it’s just unbelievable. After Russia here is further down in the article. After Russia cut off most of its gas to the European Union, the German government asked Iran to keep its 1960 coal fired plant running a few months longer. Then we remember we saw the Greta that was staged in Iran when the coal mine was shutting down. They were shutting down the coal mine so they could put in wind. What happened last month? [00:06:13][148.1]

Michael Tanner: [00:06:14] It stopped blowing. What’s the saddest part about this stew is that Germany used to once be the manufacturing envy of the world. You think manufactured, good and qual? We always. We were joking about this yesterday. Still, you can have. There’s three options. Good, fast and cheap. You get two of them. Germany. You got all three of them because they were good, they were quality and because of the longstanding infrastructure and manufacturing base that they were able to really crank out high quality manufacturing items fast. They raise energy costs. And that’s really what the lack of Russian gas is showing. When you massively raise baseload electrical costs, industry shuts down. It’s part of what’s driving companies outside of the California politics. It’s what its energy costs are, what driving companies out of California. [00:07:00][46.2]

Stuart Turley: [00:07:01] This same thing, Michael, is what you see from New York. In California, because Texas has one half the cost of electricity. So you’re seeing companies come rolling right on into Texas y lower. [00:07:18][16.5]

Michael Tanner: [00:07:18] Cost, Dell, ERCOT, we’ve got cheap prices. [00:07:20][1.6]

Stuart Turley: [00:07:21] Do I know. [00:07:21][0.3]

Michael Tanner: [00:07:22] Someone should tell ERCOT Texas has cheap prices? [00:07:24][2.2]

Stuart Turley: [00:07:25] Oh, yeah. There you go. All right, let’s roll to the next one. CUTTER And I want to ask our listeners out there, send us questions questions@EnergyNewsBeat.com. And Michael, is it cutter or guitar or curry? I hear it’s. [00:07:43][18.2]

Michael Tanner: [00:07:43] The third one. It’s probably Cutter. I pronounce it. [00:07:46][2.6]

Stuart Turley: [00:07:46] Guitar, guitar. And I get people all grump down when I’m trying to set up a meeting with the Minister of State. And he’s also the president of Qatar. Energy underlined the importance of security, affordability and sustainability in the quest for realistic energy transition. Unbelievable. Oh, we just talked about that. And the other article. [00:08:11][25.4]

Michael Tanner: [00:08:13] Puts this quote here, a quote. Here’s here’s the quote from Saad Scheer d Khabib. He highlights, quote, A balanced energy transition demands the incorporation of natural gas in our present and future energy. Natural gas will be the most indispensable, given its reliability as baseload source for many nations and for many years post 2050. It’s almost like he listens to the show. [00:08:35][22.3]

Stuart Turley: [00:08:36] He does. In fact, I’m going to call him here in a minute. I’m going to get him on the show. The next quote Right now, the thing, while the pivot towards renewables is commendable, they cannot be the sole solution, particularly considering their intermittent nature. That’s where natural gas is a cleaner, cost effective and ready to use component for the energy transition, which becomes vital. We in the state of Qatar cutter recognize the gravity of the climate change and consistently take actions rather than make them pledges. He is right on the money, Michael, and he and Saudi Arabia are going to use the profits from oil and gas to fund the energy transition. You and I are in the same, same boat. We’re trying to get into the U.S. and by boat. But when you sit back and kind of you try to sit back and kind of go, wait a minute, they’re in the same boat, they’re going to fund their energy transition by filling it with natural gas and oil. Okay. Let’s go to the next one here. You did good. You did good. Saying his name may not so much. [00:09:48][72.0]

Michael Tanner: [00:09:49] It’s it’s all I’m good for here. [00:09:50][1.2]

Stuart Turley: [00:09:50] Yeah. Interpreting still isn’t. I like it. Okay. Oil was added as high as at $150 a barrel. Unless the U.S. government does more barrel him. I want to just give a brief outing or comment. I met here probably five years ago, maybe six years ago. And back then he was saying. We are going to be down to 400 rigs. And we were like a thousand rigs, Michael, And everybody was sitting there kind of going, there’s no way. Sure enough. So the man, Harold knows what he’s talking about. So pay attention when he does talk and his continental resources he bought back is I think they’re providing 2 million barrels a day. They’re a player. So let’s talk about Harold’s crude output in the Permian will at one day peak, as it already has, and rival shale fields as the other Balkan region and North Dakota in the Eagle Ford in Texas. Continental chief executive Doug Lawler said in an interview with Bloomberg. Without exploration, you’re going to see 120 to 150, he said. I guarantee it’s going to send a shock through the system. Now, how come? It’s because the ESG model is folding. Investors want their money back. They’re quit investing in things. We’re seeing the renewable. Nobody’s bidding on wind farms now. They can’t. [00:11:27][96.4]

Michael Tanner: [00:11:27] No, I’m with you. I just find it funny. The title Harold Hamm asking the U.S. government to do more to control oil prices. Man, I would have not put that in my genie bottle of things. I would have guessed would have happened two years ago. I’d see Harold Hamm at an event saying we need more government intervention to lower oil prices. It’s kind of it’s a weird twilight zone we’re living in. [00:11:50][23.0]

Stuart Turley: [00:11:51] Well, in his book I have right over here, he’s probably talking about in this talent just telling by the articles. The author of the article. He definitely is. He’s referring to regulatory issues. So he he gets hammered by regulation. So I have a feeling that’s what he was talking about. [00:12:12][21.2]

Michael Tanner: [00:12:12] To say without more policies encouraging new drilling. You’re going to see more pressure. I agree with you. We should have more. I mean, I’m not against new policies. We should be you know, for every policy we enact, we should get rid of two older policies. Again, I’m just pointing out the fact that it is interesting. I didn’t see that on my bingo card when I walked in the game beginning of the year. Harold Hamm screaming for government regulation. [00:12:38][25.8]

Stuart Turley: [00:12:39] I think there’s a difference between policy and regulations. He is saying policy which says drill, baby, drill. Regulatory issue, say avoid the salamander. [00:12:50][11.1]

Michael Tanner: [00:12:51] He appointed Chesapeake’s old CEO as their new CEO, Doug Lawler. So we know exactly where this train is headed. [00:12:58][6.0]

Stuart Turley: [00:12:58] Oops. Okay. Let’s go to the next one here. Okay. How the transition push contributed to higher oil prices. This one just kind of writes itself. There’s three bullet points that the author brings up. And fossil fuel policies in the U.S. and Europe have led to lower investments and new project. Wow. We saw that one coming, Michael. $4 trillion is what we need to invest just to meet the decline curves. Oh, okay. ExxonMobil, CEO Woods. If we don’t maintain some level of investment in the industry, you can end up running short of supply. All right. Only lowering global energy demand may lead to a situation in which prices will remain under control. What does that mean? [00:13:51][53.3]

Michael Tanner: [00:13:52] I think what your what you’re seeing is I mean, that’s a fancy word of saying stop driving QE2. That’s a fancy way of saying stay inside. Turn off your AC, shut down your electricity at night. I mean, it’s that coded language that they’re throwing in there. The last a couple of days ago, Bloomberg or somebody had an article about why bugs have more protein than you think. I mean, they’re trying to goad us in order to use less energy to eat less meat and ultimately die earlier because we’re costing us so much money. [00:14:23][31.7]

Stuart Turley: [00:14:24] Well, I want to throw this ugly squirrel instead of an ugly baby. I want to make sure I don’t upset any mothers. So unless your kid looks like a squirrel. Okay, so let’s throw this ugly squirrel under this mix. You know, Michael, when we take a look at this, Reuters reported this week citing Rice dad, we love that over there. Rage dead investment in oil and gas on a global scale would only grow moderately this year to 579 billion. That compared to an annual investment rate of 521 between 2015 and 2022 after the 2014, which stood at 887 billion. Now if we need 4 trillion in. Investment. All you can see is a very big bull sitting around the corner for the oil and gas market. [00:15:19][55.1]

Michael Tanner: [00:15:20] Yeah, and I thought this quote was interesting. The secretary general of the African Petroleum Producers organization, Omar Farouk Ibrahim. This is still he didn’t pull any punches. We are being intimidated into running away from fossil fuel investment. [00:15:35][14.8]

Stuart Turley: [00:15:36] Mm hmm. Right. Well, here’s the thing. We have the ESG movement that is falling. We had Lego. Michael. We had Greg. Well, they had gone to oil free Lego bricks. They just came out and said that they’re going back to oil based products because the ESG movement is failing. I mean, even if you have toy manufacturers realizing that they can’t use straw to build Legos, you’re you’re realizing that you’re going to have to make a change. So you’re going to have to. [00:16:09][33.5]

Michael Tanner: [00:16:09] All right. Let’s go to this last one. Talk about. [00:16:11][1.5]

Stuart Turley: [00:16:11] Ford. All right. We’ve been talking about the cars. Yesterday, I talk for just a brief moment about the used car market in the these is just piling up. And Michael, we talked about it yesterday that the by the time an EV is ready to be sold on the secondary market, batteries to get them rolling again will be between 5002 $22,000. Now Ford halts work on a 3.5 billion E.V. battery plant in Michigan. Some good jobs they’re having to cut out. We are quote. We are pausing work and limiting spending on construction on the Marshall Project until we are confident in our ability to competitively operate the plant. Our T.R. Reid told Automotive Automotive News on Monday, We haven’t made any final decision about the planned investment. Here’s what the problem is. They’re getting lackluster support from the Biden administration because they’ve had all of these savings in what actually constitutes getting the money from the government and everything else. So they’re having some real problems there. And Michael, you talked about it the other day, $67,000 per TV. They’re losing out. [00:17:37][86.0]

Michael Tanner: [00:17:37] Sounds. It sounds sweet. I wonder how much of this has to do with the strikes. I don’t think it has much to do with it, but I wonder if that’s in the back of their mind here as they’re working through this. [00:17:47][9.8]

Stuart Turley: [00:17:47] I think that they’re seeing a weakness for the people wanting to go to these. And I think this announcement came right after the prime minister of the U.K. said, I’m going to make ice engines. I’m going to send that out another five years. Well, Ford’s over there looking at that in Europe going, hey, we got a little more time to to retool. So why would you want to spend this much on a battery plant when there is battery technology coming around the corner from Nasser and a few others that may be recyclable? All of this changes if we can use less critical minerals and make them recyclable so the batteries become recyclable. I’m not in. [00:18:33][45.2]

Michael Tanner: [00:18:33] Eve. Even then I might be out. You got anything else for the news? [00:18:36][2.7]

Stuart Turley: [00:18:36] Oh, no. That was quite a quite a parcel there. [00:18:40][3.9]

Michael Tanner: [00:18:41] Yeah, a parcel and a half. So I. Well, we’ll go ahead and cover what happened over in the markets and a pretty down day, to be honest with you. You’re talking about the overall S&P 500 and NASDAQ both down about one and a half percentage points, mainly off the back of Miss new home sales. A computer comp image data that missed those economic economists estimates contracts came in a little bit under what they were expected to be. They estimated 695,000 per Dow Jones only came in at 675,000. So 20,000 missed. We also saw consumer confidence declined to 103 in September. That was down from an estimated forecast of 1 to 5.5 and down from an actual print of 1 to 8.7 in August. Moving to the crude oil markets, we actually saw a little bit of a rise throughout the latter half of the trading day early on as we as the markets opened, we were a little below 88. We did see a rise all the way up to about 9053 as we sit here and record this about 610 Central Time the night before. So overnight action on crude oil. Be interesting to see where that goes. We did have natural gas actually open about seven percentage points up on the upside from 265 to to 80, 85, again, off the back of a little bit of a warmer streak coming through that Midwest there. So so that’s what you’re seeing on top of some export delays going on right now from Freeport. So that’s mainly your two your two bookends on on on what’s driving prices right now. We did see the API come out, Stu, and guesstimate a 1.58 million barrel build in the strategic petroleum reserves which we’ll find out tomorrow were today as you. Listen to this. On Wednesday the 27th, the API will go ahead and drop those strategic petroleum numbers. Again, forecast is actually 1.6. The actual quote unquote forecast at present was 1.5. So a swing there. Pretty quiet, Stu, on the I. On on the oil and gas news front, we did see, you know, as I mentioned, as we did Ron Herald Hammond and their CEO, Doug Lawler, they were on the the media circuit today. But unless we want to really want to go through Diamondback sustainability report, I’m good sustainability. [00:20:44][122.8]

Stuart Turley: [00:20:45] As long as you don’t print money that has part of it to do with it. It would be interesting. [00:20:49][3.9]

Michael Tanner: [00:20:49] Yeah. Now BP is going ahead and they’re rolling out a 178 megawatt peacock solar project in Corpus Christi in Saint Patrick’s County, Texas. That’s slated to go ahead and get building. Right now, I’m just looking at press releases. We’ve ran right three jobs to 25 million in tax revenue. If only it was going to kill the whales. [00:21:09][20.0]

Stuart Turley: [00:21:10] Oh, you kill me. You kill me, though. They. [00:21:13][3.2]

Michael Tanner: [00:21:14] Well, I really would. [00:21:15][0.8]

Stuart Turley: [00:21:16] Say you call me fat. What a great day. [00:21:18][2.2]

Michael Tanner: [00:21:20] You’re somewhat more attractive than than a whale. [00:21:22][2.5]

Stuart Turley: [00:21:23] I’m in. I’m in shape. Round as a shape. [00:21:25][2.5]

Michael Tanner: [00:21:25] What should we what should people be worried about coming up? [00:21:28][2.3]

Stuart Turley: [00:21:28] Well, I’ll tell you, the market is what I think in its ninth down day. And is it going? I think everybody’s worried about the government shutdown. You know, this political hoo ha that they’re doing up there. Can’t we all get along? I believe was a theme at one day. Let’s give what’s going on and what needs to happen for the American people. [00:21:49][20.5]

Michael Tanner: [00:21:49] There’s a lot I could say, but I’ll I’ll I’ll leave it to your guys. But imagine they. [00:21:52][3.1]

Stuart Turley: [00:21:52] Just say shut the border. [00:21:53][0.7]

Michael Tanner: [00:21:54] What just said. So hi, guys. We’ll let you get out of here. Appreciate it. For Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow. [00:21:54][0.0][1269.1]

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